That is a 5% to drop an item the bandit was carrying. If they are not carrying say... a Nightstinger, there is a 0% chance you will get a Nightstinger. If they are carrying a Nightstinger and say Worker Coveralls, if you are lucky and get that 5% drop, there is an even chance (50% in this case) it will be the coveralls and not the Nightstinger. And so on with 3, 4, 5, etc items.
I have not done the math on that 0.7% but that number would depend on how many items the bandit was carrying. I have no idea if all of the potential bandit fitouts are fully decked out. I assume that there are some bandits that carry heavy items and are not fully loaded in every slot. Maybe some dont have a helmet or some dont have a utility item.
If they are carrying just a Vertical locker and an E-Web it would be a 2.5% chance to get a Locker and a 2.5% chance to get an Eweb if you killed him.
You would be able to see he has the E-Web because he shoots you with it, and you would know he is not wearing armor when your shots are not absorbed. But beyond that you have no idea he has a vertical locker, or anything else for that matter. You only find out what they have if you kill them and are lucky to get that 5%.
Are you sure you are scanning them correctly? You must be on the ground, outside of your ship, and click the one you wish to scan. The outfit display will pop up. All bandits have items equipped.
I don't know what you have heard, but there has been no official word indicating the ability to tame creatures. Disregard anything you hear from other players as rumors until such a time that something is announced/actually being developed.